Binance Won’t Buy FTX, Cryptocurrency Market Collapses

Binance pulls out of acquisition of competitor FTX.

A figure in the world of cryptocurrencies, FTX is only a shadow of itself. While the difference between the platform’s debt and assets could exceed $6 billion, Binance has decided to withdraw its takeover bid. A pivot that caused the FTT token to crash by more than 75%, as did bitcoin (-15%, the lowest level in two years) or even Sol, the cryptocurrency from the Solana blockchain (-46%, which led to losses in a year). up to 90%).

Cryptocurrencies drop as rival Binance’s sudden rescue of major exchange FTX scares investors https://t.co/BbRydVOCEG pic.twitter.com/VfCiqrH4Uk

— Reuters (@Reuters) November 10, 2022

The Binance press release states:

Following an internal audit, as well as recent news of the mismanagement of client funds and alleged US agency investigations, we have decided not to proceed with the potential acquisition of FTX. At first we hoped we could support FTX clients to provide them with liquidity, but the issues are beyond our control or our ability to help. Every time a major industry player goes bankrupt, retail consumers suffer. Over the past few years, we have seen the crypto ecosystem become more resilient, and we believe that over time, the aberrations associated with the misuse of user funds will be eliminated by the free market.

The end of FTX is near

Seeking to strike a deal with OKX for a restart, the fourth largest crypto global exchange FTX is also under scrutiny from US regulators regarding its handling of client funds as well as its cryptocurrency lending business. Cryptocurrencies have been devastated this year as investors turn away from riskier assets amid rising interest rates. The cryptocurrency market has fallen by about two-thirds from its peak of $1.07 trillion. The latest developments marked a major turning point for Sam Bankman-Fried, who positioned himself as the savior of the industry by coming to the rescue of competitors in trouble earlier this year.